Go! could ground other island airlines

THE ISSUE

WHEN Mesa Air Group's airline takes wing this summer, a crowd of four interisland carriers will fly Hawaii's skies, the most the state has seen in years.

For consumers, particularly local and business people, the new entry -- called go! -- offers cheaper options for travel that virtually disappeared when long-time carriers Hawaiian Air and Aloha Airlines revised operations to build flagging revenues.

Mesa is gambling that there will be enough passengers to sustain its venture in a market where profitability has proven elusive, counting on increasing demand that it believes has been suppressed by price and inconvenience.

In the near term, Mesa's venture likely will spark more interisland travel, just as its initial ticket price has triggered a fare war, forcing competitors to cut their tabs by about half. But in the long run, some predict the new airline could push out others.

Paul Casey, a former Hawaiian Air executive, noted in a March 8 Star-Bulletin commentary that while Hawaiian and Aloha, both of which recently emerged from bankruptcy, are now leaner, "running an airline remains a perilous business."

Indeed, mounting fuel and labor costs have pressed several large U.S. carriers into bankruptcy. Even as Hawaii's tourism economy has swelled, the two major isle airlines have struggled.

Go! might have a better chance at surviving where other start-ups have failed. With $300 million in cash reserves and more than a billion in revenues last year, Mesa has deeper pockets to keep its enterprise going than previous entries Mahalo and Discovery.

Hawaiian and Aloha, meanwhile, will have to work aggressively to maintain their customers, but with still shaky finances, it is uncertain how long they can swallow unprofitable routes. No one wants to see carriers with long ties in the state collapse, but the lure of lower prices -- however temporary -- is hard to resist.